NEOM project reaches financial close, 30 year offtake secured

With a total investment of $8.4 billion, the project has reached financial close. The renewable hydrogen & ammonia production facility will be built near Al Muwaileh, Saudi Arabia, with Air Products to act as the engineering, procurement, and construction contractor for the project ($6.7 billion total value). Air Products reports that all major subcontracts for the project have been awarded, with construction ongoing and engineering “30% complete”. By 2026, 4 GW of wind and solar energy will drive production of more than 200,000 tonnes of renewable hydrogen per year, or over 1.2 million tonnes of renewable ammonia.

Thirty years of exclusive ammonia offtake has been secured by Air Products, one of three equal partners in the NEOM Green Hydrogen Company (NGHC). In an earnings call earlier this year, Air Products revealed that – despite the project increasing in cost from its original $5 billion price tag – the offtake price for the renewable ammonia will remain the same as that negotiated in 2020, and for the full duration of the offtake. During the same call, Air Products executives explained that the increased costs for the project were related to inflation, increased interest rates for borrowing, decisions made to increase services provided by the project partners, and a front-loading of costs for the long-term land lease. Air Products has also engaged India-based Larsen & Toubro to design & construct the renewable energy generation & transmission infrastructure at NEOM.

Air Products is proud to be shaping the future of energy with first-mover projects like this one, providing clean hydrogen to the world in a sustainable way. Air Products is the exclusive off-taker and will absorb the full production volume of the green hydrogen produced in the form of green ammonia at the NGHC facility to serve global mobility and industrial markets. Producing and exporting green ammonia supports the decarbonisation of these heavy-duty transportation and industrial sectors and will save the world about five million tonnes of carbon dioxide per year.

As the primary EPC contractor and system integrator for the facility, we are proud of the significant progress made with engineering and have awarded all major subcontracts for the project. Land preparation is also complete, construction is well underway, and the joint venture team is in place and actively executing to bring green energy to the world by the end of 2026.

Seifi Ghasemi, Air Products CEO in NGHC’s official press release, 22 May 2023

With the combined experience of our global utility scale renewable projects and innovative partners, we are making rapid strides towards the development of NGHC’s giga scale-plant, integrating up to 4GW of renewable power from solar and wind energy to supply green hydrogen to global markets at scale.

Mohammad Abunayyan, ACWA Power Chairman in NGHC’s official press release, 22 May 2023

Air Products has made clear its intentions to import ammonia from its production projects around the world (including NEOM and Ascension Parish, Louisiana) to key European ports. Already Air Products has plans to develop ammonia import and cracking facilities in Rotterdam and Immingham (one of the UK’s largest ports), enabling the supply of high purity hydrogen fuel for mobility applications.

*this article has been updated to reflect the role of Larsen & Toubro in the project